A deluge of earnings reports and two rounds of Capitol Hill testimony from Federal Reserve Chairman Alan Greenspan will flavor the week ahead. Besides dealing with more quarterly numbers, analysts think Wall Street also will continue to be concerned about a possible hike in interest rates -- though Greenspan could help calm some fears -- as well as the situation in the Middle East. These two factors could offset good earnings news and cause lackluster movement in the broader indices -- a trend that affected the prior week, analysts said. Daniel Morgan, an analyst at Noble Financial Group, called the market's movement "wishy-washy" in the past two weeks, even as investors have witnessed mostly solid earnings reports. He thinks Nokia's ( NOK) weak first-quarter earnings release on Friday and similarly weak forward guidance put a big damper on the market, which could carry into next week. Wireless carrier Motorola's ( MOT) results on Tuesday could help shed some light on Nokia's weak quarter, Morgan believes. If the company shows improvement in comparison with Nokia, then it could be that Motorola has taken market share from Nokia. Friday's results from Ericsson ( ERICY) will further reflect the state of the wireless industry, when compared with the results from Nokia and Motorola. Morgan said, however, that the news last Friday from Nokia won't be the only pull on the market early next week. "Some of the macro situations in terms of the Middle East and interest rates seem to be weighing on the market, creating this sideways movement where you would normally think earnings would be applauded," he said. "We're not seeing a lot of conviction on an aggregate basis." Paul Nolte, director of investments at Hinsdale Associates, agreed. "It's been a good trading market, but a lousy investing market," he said. "It's hard to peg day to day which way the market's going to work."
Regarding interest rates, Nolte thinks an increase will happen only when capacity utilization rates increase. But investor sentiment could turn on Greenspan's two appearances: one before the Senate Committee on Banking, Housing and Urban Affairs about the state of the banking industry on Tuesday at 2:30 p.m. EDT, and the other on Wednesday at 10 a.m. EDT, when he testifies before the Joint Economic Committee about the economic outlook.